We are gearing up to have a relatively quiet week for the
markets as we head into Labor Day weekend. The focus will remain on
economic data and headlines out of the global markets.
Shares of Tiffany & Co. (
TIF
) rallied this morning on
the company's earnings results
, with investors ignoring the company's cautious guidance. Two
takeover deals had mixed impacts on the acquiring companies, which
include M&T Bank (
MTB
) rallying on
its offer to buy Hudson City Bancorp
(
HCBK
). HCBK has struggled immensely, so some investors are betting MTB
may have gotten a potential turnaround play with this move. The
picture with financials is pretty vague with non-performing loans
and other issues that could be hanging out there. Maybe this deal
will kickstart further M&A in the space.
Meanwhile, IBM Corp (
IBM
) closed lower following news it will be acquiring human-resources
software provider Kenexa Corp (
KNXA
) for $1.3 billion in cash. Best Buy (
BBY
) shares bounced higher as the company continues its daily
headlines amid its on-again, off-again courtship with founder
Richard Schulze, who is considering a deal to take the company
private. Lastly, Apple (
AAPL
) finished higher following its court victory over Samsung late
Friday. This stock is continuing to attract under-performing fund
managers who are hoping to catch some gains to offset what may be a
current year of mediocre returns. This could end up with a melt-up
scenario that may rival Qualcomm's (
QCOM
) ascent of the late 90′s, which didn't end so well for traders
late to that game.
Are You Ready to Blow Things Up? (Figuratively Speaking)
This past weekend, we had one of the biggest baseball trades
(and salary dumps) in Major League Baseball history. The Boston Red
Sox and the Los Angeles Dodgers executed a blockbuster deal that
sent even the most seasoned sports fans for a loop.
The Red Sox have had numerous struggles this year, but the deal
to trade three of their biggest names (Adrian Gonzalez, Carl
Crawford, and Josh Beckett) away was as drastic a direction change
a team has ever made in one fell swoop. Baseball analysts seem to
think the trade will work out well for both teams in the long run,
for different reasons. The Red Sox have had clubhouse issues with
reported in-fighting among veteran players and their new manager
Bobby Valentine. Meanwhile, the Dodgers have new owners (including
former basketball great Magic Johnson) and they are ready to "buy"
a championship if need be. I guess the new owners figure why not go
all the way. The ownership group executed a highly leveraged deal
to buy the team to begin with, for an eye-popping $2 billion. I
suppose now they want to bring in the best talent money can buy
(although some would argue the Dodgers may have taken on a bit too
much salary in players that may not be worth the money they are
owed - specifically Crawford, who's deal with a recent rash of
injuries and had problems playing under the microscope in Boston.
Beckett's no picnic either - he's got many miles on his pitching
arm, and his negative attitude was fingered as a big clubhouse
distraction for the Red Sox).
Now before everyone thinks I've gone sports crazy, let's think
about this trade from a personal perspective. Some of you may be in
the same financial situation as the Red Sox, specifically carrying
too many expenses that aren't pushing the needle forward when it
comes to building wealth. I continue to share data showing the
increasing troubles facing those at various stages of life,
starting with coming out of college (can't find employment that
suits the lifestyle one wants, maybe having to live at home much
past one was hoping), those in their late 30′s (underwater
mortgage, uncertainty in one's employment situation), those in
their late 40′s (college costs hitting home and little saved for
retirement), those in their 50′s (the financial shock hits when one
realizes they have saved little for the later years), those in
their 60′s (trying to understand what options remain so one can
live a life of dignity - do you downsize? take social security
early? keep working?).
Even if we don't face these situations ourselves, it's a near
certainty that we at least know someone going through financial
struggles. A neighbor of mine went down to Myrtle Beach, South
Carolina last week and was talking to a couple of people in the
hospitality business. One fellow is in his early 50′s and is making
$7.25 per hour, but is happy that he's getting full health
benefits. The kicker here is the man came from a corporate
background and could no longer get a job in his specific industry,
so he grabbed his current gig more so for the benefits than
anything else. This situation is indicative of the real-life
struggles that exist in today's bifurcated economy/job market,
where some are thriving and many more are just spinning their
wheels.
So let's circle back around to the concept of "blowing things
up." Are you prepared to make big changes in your lifestyle to
secure your financial future? Would you downsize your home and move
to a new area if it made really good financial sense? If you're
still working, are you willing to continually acquire new skills
and make yourself indispensable to your employer? Or if you tend to
spend too much on luxury items, can you change your spending habits
(or those of your spouse or children)? These factors and others
will play a big role in the financial well-being of millions and
millions of Americans in the coming years.
For the Dodgers, adding the players they did may help get them
into the playoffs and possibly even win a championship. Still, the
idea of multiple titles could be more of a pipe dream. Paying
handsomely for the glory to be on top - or at least look like you
should be on top - tends to have long-term consequences. So think
carefully about what direction makes better sense for you,
regardless of whether the topic is sports, personal finance,
wealth, or investing.
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I hope everyone had a chance to check out our
Dividend.com Premium
members-only weekend articles , including new features that
highlight some of the biggest winners and losers from the week that
was, such as analyst upgrades/downgrades and earnings/story stocks.
These articles are a great way to catch up on the week that was in
the markets. We also have a rundown of how various Dividend ETFs
performed on the week.
Thanks for reading everybody. I'll see you tomorrow!
Be sure to visit our complete recommended list of the
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, as well as a detailed explanation of
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